Gear4music (holdings) Share Discussion Threads

[cirlbunting1] 08/9/2023 16:21

Stated this in my last post. Trading updates should be concentrated on cutting cost and improving profitability. I am now back in at 102. Perfect event trade.

[darrin1471] 08/9/2023 10:46

I bought November last year so sold for a 5% loss. Sold 80% of my holding. They were not in my ISA or SIPP so the the loss can offset the CGT I will have to pay this year.
I still see a lot of upside over the medium term so I am happy to buy back in at a future date.
200DMA has been a resistance since May.

[young scott] 08/9/2023 09:49

Singers comment "far too cheap for the market no.1 and key consolidator" is a bit out of date. Given the split of their turnover G4M's market should be seen as Europe including the UK and not just UK. The market no 1 is Thomann and by a very long way. We can't even be sure that G4M is the UK market leader as Andertons and Thomann don't publish the relevant figures. Its also no longer a key consolidator. The days of G4M taking large chunks out of bricks and mortar retailers is largely job done several years ago. G4M diversified with the purchase of av.com partly in recognition of this.

Today's announcement should be positively welcomed as a sign that things have stopped getting worse and they are now giving concentration to making a return on what they have. At the end of March they were still highly overstocked compared with pre-covid times so should have good availability over winter. Assuming that the Board expectations were in line with those of Progressive Research as published on the G4M website then they should be on target to make a small profit this year and next but still with a small net profit given the size of their turnover. Other than a bit of shoring up of the forecast nothing yet from the company to suggest much share price movement for a while.

[saracen3] 08/9/2023 09:43

and killing off the opposition every day.

[philly cheesesteak] 08/9/2023 09:32

Thanks for the cheap shares darrin1471. Bananas to sell at 3.5x EV/EBITDA, they are priced to go bust IMO and don't need positive news to double to a more sensible market cap in line with the 2019 lows.

A break of the 200DMA at £1 opens significant upside, this traded at £8 in 2017 and £10 in 2021, my guess is that if private it would be worth somewhere in between the highs and lows - so in the £4-6 range. FWIW the all time average price paid for a G4M share over 2090 trading days since the 2015 IPO is £4.16...

[darrin1471] 08/9/2023 09:07

"we are prioritising increasing gross margins and cost base reduction to improve profitability, ahead of revenue growth"

There does not appear to be anything company specific to move the price up over the next few quarters.
Online only retailers do appear to have a capacity to reduce costs in times of reduced growth.
I still feel G4M has the opportunity to grow when the time is right. Now feels like a time to cut costs and preserve cash.
We may need a change in sentiment in UK online retail to kickstart the G4M share price.
I have reduced my G4M holding to a small "keep an eye on stake"

[largemerlot] 08/9/2023 08:18

Cheap as chips

[saracen3] 08/9/2023 08:13

Singers note 188p target

Gear4music (Buy) - performance in the 1st 5 months of the year has been in line with expectations. In line with strategy, G4M is prioritising gross margin uplifts and costs reductions to improve profitability, ahead of less profitable revenue growth. Management is pleased with the progress being made in these areas including significant cost efficiencies in its software development unit, and increased trading agility. In addition, the group is well prepared ahead of the upcoming seasonal peak period, backed by a robust level of stock availability, and the Board remains confident in its medium and long-term profitable growth strategy, which the current margin-enhancing phase establishes the platform for. G4M’s recently launched pre-owned system is trading well and showing signs of being a long-term growth driver, having successfully completed several ‘000 trade-ins since the timely launch in March. It has also recently launched the system into Europe, and has confidence pre-owned will evolve to become a meaningful component of the group’s revenue portfolio in the future. While no metrics are given today (H1 TU due on 19 Oct), if FY24 sales growth is lower than our 7% forecast, we see this being countered by higher margins (SCMe +110bps) and/or better cost efficiency (SCMe +0bps). For example, earnings forecasts could be delivered on ‘flat sales’ via 20bps outperformance in both margins/costs. Higher profitability alongside improving FCF and reducing ND would address the pivotal issues and be a catalyst for re-rating, with the stock on c3x EV/EBITDA near the current all-time lows and offering an adj. FCF yield of c16%. Far too cheap for the market no.1 and key consolidator.

[bigbigdave] 08/9/2023 08:00

No worse it would seem

[ali47fish] 08/9/2023 07:58

where is everyone toolate no on around to comment on update- seems steady

[darrin1471] 18/8/2023 19:24

G4M AGM and probably trading update 8th September

[darrin1471] 18/8/2023 19:23

Online retail sales appear to be on an upward trend again. Many UK online retailers are 90% down on post covid highs.

From the ONS retail sales July 2023:
"Online spending values rose by 4.1% in July 2023 because of strong growth in non-store retailing and other non-food stores.
The value of online spending rose, while the value of retail sales as a whole fell. Because of this the proportion of online sales rose to 27.4% in July 2023 from 26.0% in June 2023.
This is the highest proportion of retail sales taking place online since February 2022 (28.0%) and remains significantly above the pre-coronavirus (COVID-19) pandemic levels (19.6% in February 2020)."


Figure 5 in the above link shows online volume sales falling as stores reopened reaching a bottom in Dec 2022. Since then the volume of sales has been rising steadily

[darrin1471] 13/7/2023 19:01

54% of G4M revenue came from the UK in FY23

Only 37.5% of households have a mortgage in the UK.

[saracen3] 13/7/2023 17:30

Remember 2/3 of sales are overseas where mortgage rises have been much smaller.

[darrin1471] 13/7/2023 17:13

A flurry of trades in the last hour today at 105p.
Highest volume since June results.
It was a strong day for online retailers in general today.

[saracen3] 30/6/2023 17:27

Takeover would have to be much higher than the current price.

[ali47fish] 30/6/2023 17:09

thanks saracen sow your earlier postwith singer's comments which sound encouraging- if the company is taken private what happens to our holdings without a market?

[saracen3] 30/6/2023 16:45

Company in good shape, meetings with shareholders after figures well received.

CEO might wish to take the company private.

[ali47fish] 30/6/2023 16:27

please those knowlegeable posters any idea why the share price is nudging up- no news!

[darrin1471] 30/6/2023 14:41

You can currently sell G4M for 110p.
200ma is 103p

[darrin1471] 29/6/2023 16:33

16:20 I was unable to get a quote on even 100 G4M shares but was offered 102.45 to sell 10K

[saracen3] 29/6/2023 16:28

Government looking to encourage more music in state schools.

[qipincha] 29/6/2023 16:17

Anything exciting?

[darrin1471] 29/6/2023 13:06

I tried a test buy/sell today and I could get £10K at 102.74 and sell for 100p
On L2 Buy orders 93-95. Sell orders 103-105.